Over the last few years, we have helped sellers save a bit of cash on transfer tax. The state legislature “rebranded” this law this week, but the savings to home sellers remained in place. We received the following from the Michigan Association of Realtors, outlining the criteria of qualifying for the transfer tax break:
Sellers may be exempt from paying the State transfer tax if the following criteria have been met:
The property must have been occupied as a principle residence, classified as homestead property;
The property’s State Equalized Value (“SEV”) for the calendar year in which the sale takes place must be less than or equal to the property’s SEV for the calendar year in which the seller acquired the property; AND
The property cannot be sold for a price exceeding its true cash value for the year of the transfer.
The title company actually collects less transfer tax at close, so it is important for a seller to make the title company aware of their eligibility.